That's a very good point and should be a basis of any additional payment. She should not be out of pocket due to additional tax being deducted from the amount, so the life company should pay extra to cover the additional tax she will incur by going over the 20% threshold. Otherwise, she will not be at much of a loss given that there are no returns on deposits.Luckily she did not seem to be in need of the €40K during the past three years, and now that the payment is being regularised she may need to be careful she does not pay more tax than required on a one off payment if it brings her from a 20-40% tax threshold say.
I am assuming the pension company sent more than one letter? They probably followed up with letters announcing cessation of payments. You say she is vague about the letters she did get, so maybe a trawl through the paper work she has to see if there is anything else overlooked?
Thank you clamball, very helpful to know those qu's. The fund was transferred in 2017 from prev fund Mgmt company to the existing Mgmt. co, so I do think something was missed in this time. Also, the customer service agent admitted he could see her address on an old P45 so I don't believe procedure was thoroughly followed.Luckily she did not seem to be in need of the €40K during the past three years, and now that the payment is being regularised she may need to be careful she does not pay more tax than required on a one off payment if it brings her from a 20-40% tax threshold say.
I am assuming the pension company sent more than one letter? They probably followed up with letters announcing cessation of payments. You say she is vague about the letters she did get, so maybe a trawl through the paper work she has to see if there is anything else overlooked?
I do think it is fair to ask the pension company if their procedure was followed correctly at the time. When the letter returned did they check the details they had in their system. Do they have a process of sending out another letter automatically, manually etc. Do they have other contact details, phone etc? If you and they can discover a fundamental flaw in their system then it may help people in the future. But do ask the question. “My aunt had made no change to her details, phone, address, bank all the same and yet their process led them to believe she was dead, not the rightful recipient of the pension? Where did the system fail? Was only one letter ignored or were there multiple. Were efforts made to make contact by other means, bank, phone etc. Were any other steps taken to confirm that the pension recipient was dead, checking rip.ie, looking for a death certificate? Did anyone take any action aside from ceasing payment?
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